▪️Think and Answer
factory has machines which are expensive. Then, how can it produce goods that
are cheaper than those produced by hand?
Answers
Answer:
it's because machine are buyed once and the money to buy it provided by loans secondly the goods will be buyed millions of time and thier cost is used to fill out interest of loans And sometimes government provides several subsidies.
Answer:
A factory has machines which are expensive but then too it can produce goods which are cheaper than hand - made goods. This is because machines are non-living resources which have least cost of maintenance and have one time investment. If machines as an asset bought ones can work for even decades as well as centuries. Where as hand- made goods are the result of use of human resource which continuously needs investment like wages, salary,etc.
Also a machine can do work of several workers which will reduce production cost and eventually reduces prices of good.
This is why machines made goods have lower prices than hand-made goods.
For e.g. : If a textile factory owns a machine worth rs.10000 which does the work of stapling, stitching and dyeing. Thus the total production cost of the good or price of the good will be rs.10000. Also this cost will reduce in future as there is no other investment or there is no need to buy an asset more because machines are non-living resource . Where as another textile factory has labour for all these works where the wages of the workers is rs. 500 each. Also for every other production the cost will remain same as to give wages to workers . So the total cost of production of the good or the price of the good will be rs. 1500.
Clearly we can see that the price of good produced by machines is less than that of hand - made.
In this way,goods produced by machines have low price than that of goods produced by hand - made.